Study paints complex portrait of low-wage workers

San Diego's low-wage workers run the gamut from teenagers earning cash through summer jobs, retired homeowners working part time to supplement their Social Security payments to parents struggling to raise children while in the depths of poverty, according to a report released this week by National University System's Institute for Policy Research.

The low-wage workers include high school dropouts and holders of master's degrees, first-time job-seekers and middle-aged workers who were displaced by the Great Recession, native-born Americans and newcomers who can't speak English.

Nearly 30 percent live in households whose combined income is less than a single person would need to match San Diego's living costs, while a similar number live in relatively well-to-do households bolstered by the higher pay of parents, spouses or roommates.

"San Diego’s low-wage earners are diverse, complex, and have varying levels of education and household income," said Vince Vasquez, senior policy director at the IPR.

In short, the data show a complex picture of the workers who would benefit most from a proposal at the San Diego City Council to hike the minimum wage over the next three years, rising from the statewide minimum of $9 that takes effect July 1 to $11.09 in July 2015, $12.09 in July 2016 and $13.09 in July 2017, following the lead of cities including San Francisco, San Jose and Richmond, which already have set minimums higher than the state requirement.

Vasquez said that before taking such a step, the council should spend more time examining the varying needs of the low-wage workers, including how many rely on the jobs to make ends meet versus how many use the jobs for pocket change or as entry-level positions with hopes of advancing.

But Peter Brownell, research director at San Diego's Center for Policy Initiatives -- which has been one of the driving forces behind the wage hike -- said the data show that the need for higher wages is on the rise.

"To me, what the data show is that low-wage jobs are increasingly being filled by people who have graduated college but who can't find a job elsewhere," he said. "These aren't just teenagers. The demographics has shifted significantly and we really need to reflect that."

According to the IPR study, roughly 256,000 San Diego wage earners -- or 37 percent of workers on local payrolls -- make less than $23,067 per year, which would be the equivalent of a full-time salary using the $11.09 minimum that the city council's proposal would set next year.

That minimum is slightly below the $11.38 per hour -- or $23,670 per year -- that the Massachusetts Institute of Technology estimates would be needed for a self-sustaining salary in San Diego.

But the IPR report shows wide divergences among the people currently making less than that level:

-- Age: The IPR study showed 22 percent of low-wage workers in San Diego are younger than 21, including 5 percent younger than 18, the vast majority of whom are likely still living at home with their parents.

But the census data also show that 45 percent are above age 30, including 14 percent in their 40s and 18 percent in their 50s or older.

"Right now, there are more people making low-wage incomes who are above the age of 60 (7 percent of the total) than below the age of 18," Brownell said. "That seems to be a real change from the past."

-- Spouses and children: 57 percent are single, almost exactly matching the number who are younger than 30. But 31 percent are married and 12 percent have been divorced, separated or widowed, likely including a large number who are raising children.

Although the IPR study did not examine the topic, federal data suggest that nearly a third of minimum-wage workers are raising children. Some of them, especially single parents, have to take two or three jobs to make ends meet.

According to MIT's calculations, a single parent raising a child would need at least $47,478 -- the equivalent of $22.83 per hour -- to make ends meet.

-- Household income: 29 percent of low-wage workers live in households that make a total of less than $23,850 per year, the federal poverty standard for a four-person family. Some make so little money that they are homeless, living out of their cars or sleeping on the couches of friends and relatives.

But an identically sized 29 percent live in households that make more than $70,000 per year, reflecting the income of their higher-earning spouses or parents.

Brownell suggested that those figures seem to include a number of workers in their 20s who may be living with their parents because they haven't yet found jobs that could pay enough for them to live on their own.

"Right at the time the economy tanked, there were a number of college graduates who lived at home because they couldn't find jobs," Vasquez said. "These numbers could be picking up on that."

In fact, the numbers show that while at least 12 percent of low-wage workers never graduated from high school -- an impediment to getting a higher paying job -- 16 percent have graduated from four-year colleges, including 7 percent with master's degrees.

-- Nationality and language: 67 percent of low-wage workers are native-born U.S. citizens and 53 percent speak only English at home. On the other hand, 18 percent have not yet gained citizenship (the census data does not include undocumented workers) and 11 percent speak English either "not well" or not at all -- another impediment toward getting a higher-paying job.

-- Occupations: Not including waiters and waitresses, who receive extra compensation through tips, the biggest occupations for low-wage earners are cashiers, with 12,258 local workers; retail sales, 11,760; cooks, 11,009; janitors, 7,455; and customer service representatives, 6,653.

Vasquez said that before raising the minimum wage, the city council should study more about the work trajectory of those low-wage workers to see how long they remain at the minimum before getting higher-paying jobs.

University of San Diego economist Alan Gin, however, says that raising the minimum to $13 per hour merely brings it back to where it would be if it had kept pace with inflation since the peak of its purchasing power in 1968.

Because the wages have repeatedly stalled over the past several decades, he says, local minimum wage workers have 63 percent less purchasing power than they would have in the late 1960s.